Correlation Between Orosur Mining and Gildan Activewear

Can any of the company-specific risk be diversified away by investing in both Orosur Mining and Gildan Activewear at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Orosur Mining and Gildan Activewear into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Orosur Mining and Gildan Activewear, you can compare the effects of market volatilities on Orosur Mining and Gildan Activewear and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Orosur Mining with a short position of Gildan Activewear. Check out your portfolio center. Please also check ongoing floating volatility patterns of Orosur Mining and Gildan Activewear.

Diversification Opportunities for Orosur Mining and Gildan Activewear

-0.24

Correlation Coefficient

Orosur Mining  Gildan Activewear

Very good diversification

The 3 months correlation between Orosur and Gildan is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Orosur Mining and Gildan Activewear in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gildan Activewear and Orosur Mining is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Orosur Mining are associated (or correlated) with Gildan Activewear. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gildan Activewear has no effect on the direction of Orosur Mining i.e., Orosur Mining and Gildan Activewear go up and down completely randomly.

Pair Corralation between Orosur Mining and Gildan Activewear

Assuming the 90 days horizon Orosur Mining is expected to generate 45.85 times more return on investment than Gildan Activewear. However, Orosur Mining is 45.85 times more volatile than Gildan Activewear. It trades about 0.08 of its potential returns per unit of risk. Gildan Activewear is currently generating about 0.13 per unit of risk. If you would invest  3.50  in Orosur Mining on October 26, 2024 and sell it today you would earn a total of  5.70  from holding Orosur Mining or generate 162.86% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	99.63%
Values	Daily Returns

Orosur Mining  vs.  Gildan Activewear

Orosur Mining

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Orosur Mining are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, Orosur Mining reported solid returns over the last few months and may actually be approaching a breakup point.

Gildan Activewear

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Gildan Activewear are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite quite unsteady forward indicators, Gildan Activewear may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Orosur Mining and Gildan Activewear

The main advantage of trading using opposite Orosur Mining and Gildan Activewear positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Orosur Mining position performs unexpectedly, Gildan Activewear can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Gildan Activewear will offset losses from the drop in Gildan Activewear's long position.

The idea behind Orosur Mining and Gildan Activewear pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.